Milar Corporation makes a product with the following standard costs: In January the company produced 3,310 units using13,240 pounds of the direct material and 2,768 direct labor-hours. During the month, the company purchased 14,000 pounds of the direct material at a cost of $35,100. The actual direct labor cost was $54,960 and the actual variable overhead cost was $23,860.The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.The labor rate variance for January is:
A) $400 Favorable
B) $400 Unfavorable
C) $2,000 Unfavorable
D) $2,000 Favorable

Question

Milar Corporation makes a product with the following standard costs:  In January the company produced 3,310 units using13,240 pounds of the direct material and 2,768 direct labor-hours. During the month, the company purchased 14,000 pounds of the direct material at a cost of $35,100. The actual direct labor cost was $54,960 and the actual variable overhead cost was $23,860.The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.The labor rate variance for January is:
A) $400 Favorable 
B) $400 Unfavorable 
C) $2,000 Unfavorable 
D) $2,000 Favorable

Quizplus · Accepted Answer

The Answer of Milar Corporation makes a product with the following standard costs:  In January the company produced 3,310 units using13,240 pounds of the direct material and 2,768 direct labor-hours. During the month, the company purchased 14,000 pounds of the direct material at a cost of $35,100. The actual direct labor cost was $54,960 and the actual variable overhead cost was $23,860.The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.The labor rate variance for January is:
A) $400 Favorable 
B) $400 Unfavorable 
C) $2,000 Unfavorable 
D) $2,000 Favorable

Milar Corporation Makes a Product with the Following Standard Costs